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#Bear Case
Added 3 months ago

Livewire 'Buy, Hold, Sell'. Two fundies - Montgomery Investment Management and Shaw and Partners - rate CTD as a Sell due to the impact of the coronavirus on second half earnings. They see it as just another headwind to the corporate travel sector generally, along with Brexit and lower consumer spending.

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#Market Updates
Last edited 3 weeks ago

07-May-2020:  Covenant Waiver and Market Update

Covenant waiver on existing facility

Corporate Travel Management (CTM, ASX:CTD) is pleased to announce that it remains in a strong liquidity position and has reached agreement with its existing banking group to waive all financial covenants for calendar year 2020.

The following key terms have been agreed:

  • Waiver of all financial covenants for CY2020 including the removal of COVID-19 from MAE definition
  • Covenant testing for the period ending 30 June 2021 to be based on 2H21 performance
  • Total facility £100 million (circa AUD200 million) reduced by £25 million from £125 million
  • Facility term maturity remains August 2022

Managing Director Jamie Pherous said, “We are pleased with the continued support of our banking group and the outcome that we have achieved.  As at today, we are in a net cash position of approximately $30 million (net of client cash) and when combined with the revised banking facility terms and low cash burn, we remain in a strong liquidity position and are well placed to rebound once travel resumes.” 

Market Update:  Macquarie Australia Conference Presentation 

The announcement [link above] also contains a market update presentation that Managing Director Jamie Pherous presented today at the Macquarie Australia Conference.

It ends with the following Summary:

  • Strong liquidity position. $30m net cash @7 May with committed facility of approx. AUD$200m
  • Relatively low monthly cash burn of $5-10m/month. Currently at the lower end of cash burn range
  • Resilient business model that is highly flexible, capital light and can ramp up/down quickly as required
  • Positioned for domestic recovery. Can return to profitability with a modest recovery in domestic travel
  • Investing in our technology platforms and feedback loops to deliver new solutions as required
  • Total client base has increased throughout the Covid-19 period.  The number of clients has increased through new client wins, retentions and extensions of contracts.

--- click on the link at the top of this straw for more of this announcement - including the full presentation ---

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